The Bureau of Economic Analysis has released its annual data on compensation levels by industry. The data show that the pay advantage enjoyed by federal civilian workers over private-sector workers continues to expand. This state of affairs is a thumb in the eye of the private sector, which continues to struggle with high unemployment. Many private sector employees have been forced to take pay and benefit cuts while continuing to fund generous federal employee compensation with their taxes.

The House is scheduled to pass another $26 billion bailout for state and local governments on Tuesday. The legislation provides another $10 billion for education and $16 billion to extend the increased share of Medicaid being paid for by the federal government since passage of the stimulus.

A common theme with federal programs that fund state and local activities is that the distribution formulas are highly complex and politically-driven. The result is that policymakers at the federal and state level are constantly jockeying for more money, while the general public remains largely ignorant as to where the money comes from and how it’s spent.

As the fall elections approach, two factions within the congressional GOP have emerged. The first faction, which generally controls the Republican leadership, is short-term oriented and just wants to return the GOP to power in Congress. Riding the wave of voter discontent over the government’s finances is a means to an end – the end being power.

Amtrak has announced that it will spend $300 million on 130 new rail cars, including sleeper and dining cars, for its long-distance trains. The government company’s announcement came with the obligatory statement that the purchase will create 575 jobs. That’s more than $500,000 per job.

The city of Bell, CA recently made national headlines when it came to light that city officials have been receiving massive six-figure salaries. Bell taxpayers were so irate that police in riot gear were required to maintain control at a recent city council meeting.

According to the administration’s latest budget figures, the federal government is projected to run huge annual deficits throughout the coming decade. The actual figures could end up being considerably larger, particularly if policymakers continue to justify additional budget-busting for alleged “emergencies.” As a previous blog shows, these deficits would be driven by excessive spending.

Federal spending reached $1 trillion in fiscal year 1987. Then it took fifteen years for spending to reach $2 trillion in 2002. Then it only took six years to reach $3 trillion in 2008. President Obama’s new midsession budget projections show that it will reach $4 trillion in 2014 and take only four more years to top $5 trillion in 2018. Meanwhile, the Washington establishment is getting all worked up about the deficit effects of extending recent tax cuts, which amount to just a few hundred billion dollars a year.